Best Way to Donate a Car to a Friend?

[papa_squat]

Hello everyone!

My husband and I have a '97 Honda Civic EX that has been been sitting in our driveway for almost two years. It has cracked camshaft mounts and we haven't been able to find replacement parts at a reasonable price, but the vehicle is still drivable for the time being and likely will be for a while. Since we have two working vehicles and the car still drives well when we take it out enoughto keep it in shape, we haven't been terribly motivated to hunt down the parts in any case, so we decided to see if we knew anyone who'd like to buy it.

I have a coworker who is interested in purchasing the car. We told him about all the original issues with the car (including water damage when a window was broken during a bad storm) and he was saving up the money to buy it. Since he's a friend and I know that he is supporting a family of six on his own, including working around an awkward bus schedule for months to get to work, we offered him a deal of $800. My husband believes we could easily get $1,500 for it otherwise, but we wanted to help him out.

My coworker was planning to come out to test drive the car this weekend, but just called to say he can no longer buy the car at this time. A friend of the family ended up in a bad domestic violence situation and he has taken her and her young son in for the time being. He is helping her get into Section 8 housing and arrange a restraining order, but until she can get a job, he said he is taking care of the two of them.

I know him well enough to know his story is not bull, and I feel terrible because I know he needs this car more than we do. I am interested in donating the car to him, but my husband thinks we were giving him a good enough deal on the car as it is. Does anyone know if there is a way to donate the car to him and get a tax break on the donation? Researching online, it appears we can only donate the vehicle itself "at arm's length," in other words to a charity were we have no decision as to who will receive the car. Is it possible for us to make a cash gift to him for $1500 so he could purchase the car and we could write off the gift on our taxes? immpretty sure it doesnt really work that way and we don't want to manipulate the system, but I want my friend to have the car. Even if sold the car to someone else and made a cash gift to him to help him out, he would still have to hunt for a driveable car.

I know his problems are not ours, but considering that we have secure finances and we could afford to be more charitable, I'd love to help him out, especially since he's so charitable to a family in that situation. Thanks in advance!

[disneysteve]

You can't get a tax deduction for a donation to an individual. You can only get a deduction for donating to a qualified charity. For your plan to work, you need to get a charity involved as a middleman - donate the car (or cash) to a church or other charity and have them pass it on to him.

[papa_squat]

You can't get a tax deduction for a donation to an individual. You can only get a deduction for donating to a qualified charity. For your plan to work, you need to get a charity involved as a middleman - donate the car (or cash) to a church or other charity and have them pass it on to him.

Thanks for your reply, Steve, that's the conclusion I came to as well. I might try to see if he attends a church where that might be arranged, but I'm pretty certain most charities have to do it at arm's length, so it may not go to him. I'm hoping the situation resolve soon so if nothing else we could at least sell him the car at a discount. Thanks again!

[disneysteve]

Thanks for your reply, Steve, that's the conclusion I came to as well. I might try to see if he attends a church where that might be arranged, but I'm pretty certain most charities have to do it at arm's length, so it may not go to him. I'm hoping the situation resolve soon so if nothing else we could at least sell him the car at a discount. Thanks again!

I think a church would be more flexible. We've had times at our synagogue when a particular congregant or family was struggling. Money was collected to help them, so I was able to write a check to the synagogue (which is deductible) but know that it was going to a specific family.